One of the Main Advantages to the Retail Inventory Method

question 69

True/False

One of the main advantages to the retail inventory method over the gross profit is the retail method uses current-period estimates whereas the gross profit used past periods.

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Definitions:

Journal Entries

Recorded transactions in the accounting ledger that reflect the financial activities of a business.

Voucher

A document or record acting as evidence for a transaction, or as an authorization for payment.

Net Method

An accounting technique where discounts for early payment are calculated and recorded as lower sales prices at the time of sale, in anticipation that discounts will be taken.

Periodic Method

An accounting method that records inventory purchases and sales periodically, typically at the end of an accounting period, instead of continuously.